Insurance companies are unique — most of their interactions with customers happen through an agent. In effect, a chunk of technology investment goes into improving agent experience. Insurers have developed systems to advise agents on products tailored for specific customers, depending on their history with the insurer and income band. Bajaj Allianz Life Insurance has a mobile app to hire agents. This helps in training, exams and licensing. It has brought on board 15,700 consultants digitally in the past year, cutting down processing time by half. Insurers have launched mobile phone apps, making it easier for customers to transact with them. They are, slowly and surely, moving towards paperless claims as well. These are, however, only the first steps in digital transformation. Changing core systems is expensive and complicated. So, most transformation initiatives focus on improving systems of engagement with customers. With the constant advancements and better use of digital tools in the last few years; most of these challenges seem to be addressed efficiently. While technologies such as Robotic Process Automation (RPA), Artificial Intelligence (AI), Block chain, and Advanced Analytics are working as promoters to enhance the importance of insurance, the insurers are working hard to create a more streamlined and integrated insurance system.

1. International Journal of Engineering and Management Research e-ISSN: 2250-0758 | p-ISSN: 2394-6962
Volume-10, Issue-1 (February 2020)
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Technology and Innovation in Insurance– Present and Future Technology
in Indian Insurance Industry
Dr. P.Revathi
Head and Assistant Professor (SG), Commerce Banking and Insurance, Dr. N.G.P. Arts and Science College
(Autonomous), Coimbatore, INDIA
Corresponding Author: revathi@drngpasc.ac.in
ABSTRACT
Insurance companies are unique — most of their
interactions with customers happen through an agent. In
effect, a chunk of technology investment goes into improving
agent experience. Insurers have developed systems to advise
agents on products tailored for specific customers, depending
on their history with the insurer and income band. Bajaj
Allianz Life Insurance has a mobile app to hire agents. This
helps in training, exams and licensing. It has brought on board
15,700 consultants digitally in the past year, cutting down
processing time by half.
Insurers have launched mobile phone apps, making
it easier for customers to transact with them. They are, slowly
and surely, moving towards paperless claims as well. These
are, however, only the first steps in digital transformation.
Changing core systems is expensive and complicated. So, most
transformation initiatives focus on improving systems of
engagement with customers.
With the constant advancements and better use of
digital tools in the last few years; most of these challenges
seem to be addressed efficiently. While technologies such as
Robotic Process Automation (RPA), Artificial Intelligence
(AI), Block chain, and Advanced Analytics are working as
promoters to enhance the importance of insurance, the
insurers are working hard to create a more streamlined and
integrated insurance system.
Keywords-- Insurtech, Blockchain, Artificial Intelligence
(AI), Digitization, Human Intellectual Capital
I. INTRODUCTION
As the insurance industry is evolving, so are the
customers. Insurers are constantly receiving ideas from all
the corners, and thanks to technology. And this is impacting
our consumer behaviour. The state of the insurance sector
in our country is entirely different from that in other
countries. Despite constant liberalization of the current
insurance industry, a major part of the population still does
not believe in any insurance. This is majorly because the
many challenges associated with the sector including a split
ecosystem, regulatory uncertainty, and disjointed data
continue to remain specific.
Today’s tech-savvy customers look for digital
tools and experience from their insurer at par with what
they receive from any e-commerce or any other retail
industry. While talking about the insurance industry, the
consumers these days’ demand digitally-oriented
applications or websites that provide complete customer
support. Many insurers have already started adapting digital
tools to make it easier for their customers and their family
members to navigate the healthcare ecosystem. Some of the
powerful features of the tools include digital on-boarding,
ease of selecting plans based on cost and preferences, and
personalized content for better understanding of the claims.
II. LEVERAGE ANALYTICS
Analytics is expected to play a great part in driving
the insurance industry in the coming few months. The
technology will enable insurers across the country to
efficiently enable predictive analysis. Insurers can leverage
analytics to make predictions about a person’s probability
of getting an ailment and therefore, timely suggest him to
take necessary precautions. This can be done by
implementing intelligent health analytics to a patient’s
medical history in order to predict the future health
approach. The technology can even prove positive results
for deciding the best course of action, in terms of
identification of most effective treatments and drugs
resulting in cost-efficient treatments.
Introduction of ChatBots and Voice Assistant
Yet another impressive trend that the insurance
industry is witnessing is the introduction of ChatBots and
Voice Assistant for enhanced and meaningful customer
engagement. Both these technologies are gaining quick
popularity amongst the insurers as well as the consumers.
The technology specifically leverages Artificial Intelligence
(AI) to simulate productive conversation with its users
while delivering powerful customer engagement. One of the
important reasons for the introduction of ChatBots and
Voice Assistant in the insurance sector is the increasing
aged population that demands continued care.
Challenges by New Age Firms
New age insurance firms, nimble and
technologically savvy, are challenging these old economy

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players. Digit Insurance, a two-year-old insurer that focuses
on creating smaller value products, is using block chain-
based systems at the backend to speed up claims
processing. It has already brought down time taken to
service a mobile phone damage claim from about 25 days to
a few hours.“Servicing smaller ticket sizes means it has to
be a cost-effective and technology-driven solution.”Many
of these features, like automatically initiating and
processing trip delay claims within a few hours, would not
have been possible till a few years ago because the
technology was simply not available.
Bancassurance
The insurance sector has evolved rapidly since
privatization in the early 2000s. Over the last 17 years, the
industry witnessed several dramatic shifts, including the
emergence of Bancassurance, de-tariffing regulatory
activism, the explosion of health insurance, as well as the
emergence of large government insurance schemes.
Insurers are being challenged to bring in strategies that
deliver on the promise of experience and operational
excellence—forcing a relook at existing processes, tools
and resources. Often the answer seems to lie in emerging
technologies and data.
III. TECHNOLOGY AND INNOVATION
IN THE INSURANCE SECTOR
Insurance regulation and innovation hubs While
innovations are generally a positive development, there are
a number of potential policy and regulatory ramifications
which can create some uncertainty and certain limitations in
business developments. In terms of competition policy, the
potential to have new entrants to the market through the
application of innovations and new technologies could
bring greater consumer utility. The rationale for
competition law or policy is to improve the consumers’
welfare and the efficiency in production and supply, which
would lead to lower prices and wider choice. The
possibility of new entrants in the form of start-ups and
greater choice as a result of innovation and technology
could bring a number of positive developments to
competition in the insurance market. When start-ups want
to become an insurer or an insurance agent/broker, there are
potentially prohibitive capital and/or fit and proper
requirements that must be met to gain authorization to
operate. Perhaps for this reason, there are very few
InsurTech start-ups that have gained insurance underwriting
licenses, and most have broker licenses.
Source: Source: Pulse of Fintech 2018, Global Analysis of Investment in Fintech, KPMG International (data provided by
PitchBook) January 4, 2019.
IV. INSURANCE TECHNOLOGY
TRENDS TRANSFORMING THE
INDUSTRY IN 2019
Advanced insurance technology is already an
integral part of the P&C industry, for both carriers and
insured’s. Getting insurance quotes can be as easy as
clicking a button, managing coverage can typically be
accomplished via a mobile app, and paper insurance cards
are mostly a thing of the past.
Insurance technology is poised to mature even
more in 2019. While some of these tools are already
employed by some carriers, we see them becoming more
0
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100
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2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8
CapitalInvested
Year of Investments
GLOBAL ANALYSIS OF INVESTMENT IN
FINTECH

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and more commonplace throughout the industry. Insurers
looking for a competitive edge should consider embracing
one or more of these eight emerging insurance tech trends.
Insurance Trends in 2020
The key challenges faced by insurance innovators
as that have been impacting the industry. They are: Human
Intellectual Capital, Artificial Intelligence (AI), Block
chain, Digitization, Personalization and Data, as well as
Hiring and Retaining Technically Skilled Talent.
As with every other industry, insurance is
becoming more technologically advanced (and some may
say, disrupted) by the day though the transformation is
much too slow. There are several reasons for this, but one
that may or may not surprise you is that insurers are
struggling to attract and retain top-talent despite insurance
being a multi-trillion dollar, high-growth industry. In the
last three years, insurtech funding has increased by 60% in
the US (from US$1.46 billion to $2.44 billion according to
CB Insights), while it’s more than tripled in Asia (from
$140 million to $506 million)
1. Human Intellectual Capital
It’s one thing to be aware of the innovations
shaping the future of your industry, but implementing them
is quite another. And without talented, skilled staff, you
have little hope. This is the barrier faced by many insurers,
which is why human intellectual capital needs to be a key
focus if they don’t want to be left behind.
2. Personalization & Data
Insurers are starting to put the customer at the
heart of everything they do. By activating and collecting the
right data – from IoTs such as connected cars, activity
trackers, and even toothbrushes! – they’re able to better
understand consumer needs and offer customized advice,
coverage, and tailored pricing. This shift indicates insurers
are now viewing consumers as individuals, rather than
customer segments.
3. BEAM
Beam uses IoT technology to offer dental
insurance. Customers receive a ‘smart’ toothbrush that
tracks how well customers take care of their teeth and
provides personalized insurance plans based on this teeth-
brushing data. In doing so, the firm claims they can offer
rates up to 25% cheaper than competitors – a deal
customers are sinking their teeth into.
4. Digitization
Insurance companies are adopting digital
strategies. Not just for savings and efficiency, but for
increased customer satisfaction with a whopping 61% of
customers confirming they prefer to check their
applications online. Of course, transitioning from paper
trails to online-only isn’t easy. According to McKinsey,
nine out of 10 insurance companies say they’re struggling
to develop the technology infrastructure they need, blaming
legacy software and the sheer magnitude of their IT
systems.
5. Artificial Intelligence (AI)
Where do we start? AI and machine learning have the
potential to impact every aspect of the way insurance
businesses are run, making almost every process more
efficient. Specialized functions such as fraud prevention,
anti-money laundering, underwriting, and pricing are set to
be overhauled using this transversal tech. Meanwhile, the
data collection opportunities AI provides will help
companies achieve automation (robo-advisors are
incoming) and enhanced personalization. Of course, AI
isn’t mature yet, and a human touch is still needed to help it
do its work. But companies that fail to adopt AI now may
find themselves left behind by the time autonomous
versions appear.
6. Shift Technology
Shift Technology offers AI-based anti-claims-
fraud detection software. The company developed their
automation solutions specifically for the insurance industry
and the unique challenges insurers face.
7. Block Chain
Block chain enables the creation of a digital ledger
that can’t be altered. Using this technology, insurers can
reduce the admin costs that come with reviewing claims
and checking payments made by third parties – block chain
ensures all of this information is shared, fraud-protected,
and easy to verify. According to PWC, block chain could
particularly benefit reinsurers – reducing the steps
involved in the process and leading to potential savings of
USD $5-10 billion worldwide. For example, reinsurers in
healthcare could cut costs and save time using smart block
chain contracts to quickly verify consumer data and
insurance history, reducing the back and forth that’s
commonly involved.
8. Insurance Tech
To understand insurtech’s potential impact, it is
important to understand exactly what it is. Simply put,
insurtech is the technology that lies behind the business of
insurance. That technology includes “big data,” i.e., the
mining, analysis, and utilization of tremendous amounts of
previously uncategorized data; “machine learning,” which
is the application of artificial intelligence (AI) that provides
systems the ability to automatically learn and improve from
experience without being explicitly programmed; the
Internet of Things, which is essentially the interconnection
of everyday objects through data transmittal (for example
the thermostat in your home telling your watch the current
temperature).

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Insurance Companies spending on Technological Innovations worldwide in 2016 and 2021
V. STEPS TO BE TAKEN BY THE
INSURANCE COMPANIES
Insurance companies have to take the following
steps to embark on this journey:
 Be more agile with IT strategy and architecture.
 Monitor new trends and innovations in the
technology, data and analytics space. Educate
themselves and conduct a strengths, weakness,
opportunities and threats (SWOT) analysis
 Establish a presence in the innovation ecosystem
through FinTech hubs, technology platforms,
workshops.
 Partner with start-ups and disruptors and build
pilot solutions.
 Based on the above actions, launch changes in the
marketplace quickly. Iterate based on customer
feedback.
 Ultimately, the biggest change required is in the
organization’s culture and mindset.
VI. CONCLUSION
These technologies are already being used by
insurers in a variety of ways. A number of startups focus on
using advanced data analytic tools to more accurately
determine risks, detect fraud, and identify coverage
expansion opportunities in specific micro-segments of
various industries. Some trends include expanding
insurance distribution in rural areas, Indian companies
expanding operations overseas, and increased online selling
of insurance products. However, frauds, high lapse-ratio,
and unfavorable changes in macroeconomic factors, such as
trade breakdown, unemployment, and uncertainties in the
regulatory landscape could be characterized as key
challenges to the industry growth.
The growth will come from a number of factors,
including higher demand for retirement products such as
pension and annuity, along with low availability of
government-sponsored social security mechanisms and
rising awareness of retirement planning and growing
urbanization.
The sector will also witness growth due to factors
such as the younger ones in the demographic chart opting
for pure protection plans, push to increase insurance
penetration in rural areas, product innovations, rise of
multiple channels, and continued tax benefits. “CARE
further expects regulatory changes and government
initiatives to aid in the further penetration of insurance
products in the medium term,” it said, while highlighting
challenges, including low income of individual agents, and
low persistency ratio to continue to persist in the
segment.“These challenges would need to be addressed to
improve the depth and spread of the industry,” it stressed.
The country’s life insurance sector accounts for about 75
per cent of the overall insurance premium. The total
premium grew by a CAGR of 10.3 per cent in fiscal year
2017-18 to ₹4.58-lakh crore, from ₹1.56-lakh crore in
FY2006-07. In contrast, the global life insurance industry
grew at a CAGR of 0.8 per cent during the calendar years
2007 to 2017 and reached nearly $2.7 trillion in market size
29 56
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600
700
800
Hardware Software Service
ExpenditureinMillion
USDollars
Insurance Companies Spending in
Technology Innovations worldwide
2016 2021

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(insurance premium volume) in 2017, from $2.5 trillion in
2007.
ACKNOWLEDGEMENT
Communication No: DrNGPASC 2019-20 COM027
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